March 2, 2015

Themes for the practice of open innovation

Like my OI collaborators Henry Chesbrough & Wim Vanhaverbeke, I get a lot of emails (and receive many Google News updates) on businesses and consultants touting some claimed breakthrough on open innovation. Normally they end up in the bitbucket.

This morning I got an email from consultant Cheryl Perkins, based on the CoDev2015 conference she hosted last week month in Arizona. I first met Cheryl in 2007 — when I was hired to train Kimberly-Clark execs on open innovation — and in 2012 Cheryl invited me to present my research at CoDev2012 when it was in San Diego. She seems to consistently attracts a solid group of attendees at the CoDev conferences, which today are co-sponsored by the Management Roundtable.

However, none of those reasons are why I’m mentioning Cheryl or the conference on this blog. Instead, I think her blog posting from the conference (emailed to 1000s of her closest friends) nicely summarizes important issues today for the practice of open innovation:

[At CoDev2015] We learned:Strategy: It is critical to have a clear ‘need’ definition process, with a prioritized list of scout able needs aligned to business strategy. Needs must be written for both confidential and non-confidential use.Culture: Leverage early ‘wins’ to drive change. Involve cross functional perspectives early on. Be sure to include HR, Legal and Procurement. Use a trial and scale-up approach to build capabilities. Communicate often, both internally and externally.Processes and Tools: Tools and processes are enablers, not an end in themselves. Implement a flexible process from need identification into your stage-gate development process. Establish market potential and feasibility assessment criteria, approval & funding checkpoints, and pathways for dialog. Monitor and adapt as needed.Ecosystems: Having “know-who” is far more effective than just having “know-how,” and new channels yield new solutions. But that’s not enough. Finding and implementing new solutions requires thoughtful planning, communication and willingness to take risks. Collaborative networks are more dynamic and interconnected than traditional hub & spoke structures.

For example, strategy is one of the major themes of existing research identified by Chesbrough & Bogers (2014) in chapter 1 of New Frontiers in Open Innovation. The importance of measuring the benefits of OI for firm success was a major topic of both by West & Bogers (2014) and West, Salter, Vanhaverbeke & Chesbrough (2014), and obviously is a crucial under-developed area in the OI literature.

As West & Bogers (2014) note, culture is one of several mediators within organizations that determines whether externally sourced innovations will produce useful outcomes for the firms. The most commonly studied topic is “not invented here” — see Antons & Piller (forthcoming) for the first major lit review — but there’s more to cultural factors in OI efficacy beyond NIH.

Again, Chesbrough & Bogers (2014) noted the importance of research on tools to understand how OI is actually implemented and used. There’s a lot of research on tools for innovation contests, but frankly the user innovation literature (such as Piller and Walcher 2006) is much further developed than OI is here.

Finally, the summary articles for both of our OI projects last year — the concluding book chapter (Vanhaverbeke et al 2014) and the intro chapter to the Research Policy special issue (West et al, 2014) — noted the importance of ecosystems as both a research topic and firm strategy in open innovation. Briefly discussed in Vanhaverbeke & Cloodt (2006), Rohrbeck et al (2009) provided one of the first empirical studies to explicitly link ecosystems and open innovation. Chapter 4 of New Frontiers (West, 2014) provides an up-to-date summary of how ecosystems relate to platforms, communities and other network forms of open innovation collaboration.

Overall, I find this encouraging. While the CoDev managers have specific concerns that should be investigated by academics, nonetheless it appears the two audiences have overlapping (if not fully congruent) questions about improving our understanding of open innovation. I think that’s a testimony to the practical (and phenomenological) basis of Chesbrough’s original Open Innovation book, and the efforts of key academics (particularly Chesbrough, Vanhaverbeke and Piller) to keep the field in touch with and relevant for managerial practice.